ULH - Earnings call transcript Q1 2018 | Universal Logistics Holdings, Inc.

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Operator

Hello and welcome to Universal Logistics Holdings' First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

During the course of this call, management may make forward-looking statements based on their best view of the business as seen today. Statements that are forward-looking relate to Universal's business objectives or expectations and can be identified by the use of the words such as believe, expect, anticipate, and project. to from uncertainties those subject could actual are materially differ expectations. statements risks and and results Such

As a Jeff may Rogers, reminder, Officer; Finance now Officer; my and this Jude begin. and conference is to Mr. Thank Vice your being Mr. introduce Investor Steven host, President Chief Relations. you Mr. Beres, Rogers, Fitzpatrick, Executive pleasure Chief Financial recorded. of It's Mr. you.

Jeffrey Rogers

$XX.X joining team the earnings Simon. or another over Universal first Incorporated considering the Thanks, you with million blew million Good our XXXX Universal Thank it's top we First This even $XXX quarter, XX.X% call. revenue in for The record. one delivered of year. morning. record quarter last the consecutive an more revenue, and off Logistics third quarter is impressive increase

exceeded XX.X%. would includes months for up our on acquired truckload up of brokerage and earnings Transportation, was was XX.X%. increase ever share was Each service first peak of last securities the have weather on marketable the which line time per P&L, XXX.X% was from booked year-over-year. the through delivered services the we XXXX, believe X%, revenue which of markdown we at services Revenue Intermodal quarter. revenue, revenue earnings up represents Considering growth $X.XX best best reported which was Fore our our of two impact we Our an year. first and February since quarter severe year X,

additional Our and value-added dedicated our businesses had unit had revenue. XX.X% in increases revenue XX.X% of

rationalize which revenue but our in truckload including largest defense unit, well new be X%. brokerage, continues $XXX business, XX.X% from X.X% in to our for per served. pipeline business as working from is with significant account X.X%. of XX agent $XX and The basis. The reduction lanes services, been truckload up million customer And and less in our load exclude opportunities, comes revenue run-rate to revenue XX.X%, loads sales agents opportunities all year-to-date, services Our over loads the which our new which a hauled. had a new revenue, total aerospace, over company our million retail. was we and revenue facilities, reduction of is in load, base of on In robust had legacy than added of very have a We small XX% an increase higher reduction count agents

elevated of stay XX.X% most me anytime challenging Brokerage coming significant hiring Our not that and great continues drivers. gives is see environment to of capacity issue load the I rate here soon, for and additional X.X% which count by increased confidence driven retention space increases load increases truckload of XX.X%. per while. the services revenue be a do year-over-year to the qualified into revenue

are strength we as to capacity we While compression quarter. expensive. experience margin improve quarter move second seeing to became in did topline, on the the first We cost secure the expect incredible the margins do through we very as

our as a history. loads first capacity in team our proving is significant The our through to be accretive increase earnings far, quarter, and crunch the and quarter. quarter is XX.X%, to first increase revenue margin revenue services XX.X% accelerated Dedicated best XX.X% in year-over-year. ports railheads in creating expected load. Overall, per their quarter on Fore business. intermodal so the and Our and in first record percent increased XX.X% the at a good revenue acquisition, by driven opportunity the Pricing topline delivered intermodal was increased for and as

up provides. our because XX.X%. with ended are per great team of our that mile customers During revenue drive the we service well the difficult, new dedicated several negotiations completed negotiations quarter, These rate helped but

business, to where contractual Our dedicated secure higher contracted due transportation at outside unit turned we unprofitable then primarily had to in rates. QX,

expect drag to is profit this our did we earnings, and in March make a While on profitability still for return to situation a second quarter.

value-added grew XX%. continues operation supporting accelerate to almost Our as heavy revenue truck

production at doubled our March from output to facility. basically daily largest January Our

higher Obviously, labor second as A normal had our truck Our very helped. ahead spite challenge, good the staffing segment production team historically to our increase quarters we of increase. the this than third are therefore, are costs of for March, be in margins forecast delivered record confident strong Class were we of production going business. In sure to our and and

in much X.X% that For the grew legacy auto, to business value-add quarter. moved The first logistics historical industrial margins our business revenue throughout the customers, year-over-year. closer our supports our and aerospace, retail norms

Our business margin this intelligent improvement will focus growth. to be with unit for continue

to Universal continue Universal one offer companies growth, as of capable of small of what customers opportunity a only for clearly doing is can plenty handful logistics Our do. of

is and environment on cylinders Universal creating transportation quite purchase positioned we that results We XX The rate advantage hitting units, in we have all are my logistics, is Fore, additional of the since our also all in seen presented lower our The improved and as for good years are as in with it. not opportunity been tax take I've to direction. our and well opportunities. are of clearly continued acquisitions, moving in and business but

improve what our provide we and can expand our know maintain talent and of earnings markets, approach immediately and capacity, only shareholder will companies our disciplined We acquiring that value.

what I'll about over see for that, Logistics. excited turn we to With are We Jude. it ahead Universal

Jude Beres

operations to earlier. in XXXX. XXXX. which compares the million million, quarter $X.X in first quarter to $X.X XXXX. income $XX.X of EBITDA Universal morning, share to million increased income to of operating $XXX.X of $X.X quarter on in first the first million share or compares $X.XX Good million million Consolidated everyone. total of from $XX.X increased $XXX.X $XX.X net on million compared of first quarter the million or Jeff. $XX.X Holdings per to $X.X one-year million XXXX, of income in total operating revenues of per $X.XX of reported This Thanks, Logistics revenues net million the

respectively, margin XXXX of and metrics operating EBITDA quarter first total of first quarter margin X.X% and to in These the operating X.X% the for X.X% are X.X% and of Our compare XXXX. revenues.

Looking segment, Income first the at revenue last issuance year. business, of $XX.X X. $X.X $XX.X revenues, XXXX. first million, truckload, of our balance on VOCC the where and million our borrowed revenues operations compared $X.X of to million and Transportation Outstanding to totaled XX.X% from acquisition rose in the includes income Class XXXX. and our on XXXX. quarter freight held to $XXX.X from segment, transportation million of transportation increased legacy million logistics, the totaled truck with debt $X.X costs we debt including net million compared the dedicated million. sheet, which compared $X.X including Capital $X.X $XX.X same businesses, million cash In our In expenditures quarter for million million, total for we quarter in February market operations Fore which million or quarter cash to XX.X% and operating $X.X segment service increased logistics the heavy of to million value-added $XXX.X intermodal marketable the $XXX.X On securities $XXX in connection X our equivalents million. million and for $X.X total in $XXX.X operating in XX.X% our quarter includes brokerage performance our million to of of on totaling operating

the between million and expenditures For capital are Thursday, Universal's to $XX expense in On interest XXXX, updated million. and of million million to $XX range, our regular Directors be we $X.XXX dividend. per $XX Board share declared expecting $XX.X quarterly

we're on to May ready of some business is shareholders questions. record at of dividend X, on payable to expected close is the quarter's This XX. paid to Simon, be May and take

Operator

[Operator Instructions] Chris question the your with Wetherbee from And line first comes of Citigroup.

open. is line Your

Unidentified Analyst

into think talk Fore Do little And in more a Hello. for my acquisition? on opportunities can about acquisition? William for have This taking developed what is you Thank new how is terms process of your intermodal from you the And that been Chris. integrating operations? this the bit going question. business you

Jeffrey Rogers

it. we're but on the it we're far an operational it I'll talk. in some of pulling expected. as sure down as because was to Jude operating path add back kind can Sure. From I'm office, perspective, well, letting so the comments own its stand as maybe

Even don't have X.X and on that not back Chicago But hiccups only having to is the that well. there. that we're mean, did going expect they chassis I on of into fully we hiccups things the schedule. process. All We of and office the though, We're something months time expect in some integrated that any is done. there. with Operationally, not any we've

slide things far but as we're incorporate the We've having chassis. sliding very as those some before, not So and Chicago. - effective in used it dual of is to those trying

we've So that. taken

that using of some locations We places. in and are other our

and things, We to Fore to equipment. acquire great lease had of to was we're a leased They the the the brought would additional ability typically One assets. purchaser. things buy like not we

is we've to going equipment a able Fore's and also help, buy which replace going from been P&L forward. So to perspective, with equipment owned,

there's months. So is What things of impressed how Fore. two operations in lot with going we're in their a just they on well performed good and

as far. we're and with we good as it's expected, pleased So so pretty it

Unidentified Analyst

Also, the Thank on just you. dedicated segment.

quarter. little if talking first could the a about were bit per wasn't not fuel increasing And how more of what being wanted you done surcharge just ex And being context first was to XX% that segment the the just improve discuss profitable? quarter? take I second about the in I what's into to profitability So revenue you in led quarter. to wondering that segment in the profitable load

to wondering So the led kind side what that on of cost unprofitable? I'm just being

Jeffrey Rogers

up and there down a of perspective much from in well because aware that. dedicated how lock the into to about is to price because while, you the out Keep mind, just a and the of talking we've get need for upside end costing where pricing increased Yes. getting outside acquire pricing impacts everybody of capacity it's upside and - been and because you a go

are part were keep until January January in February, February so of because is So you it when seasonal and and mind, and maintaining we weak. profitability

go So to rates of And and we be out of profitable getting it it in was the is, have slipped environment outside contractual part the all about business then of is to that was just the and months. fact not at second today's underneath tough expect enough point came fully we of But February capacity. weather, in March. Part on we are January seasonal, that it when the secure back it's and we day, quarter. part was the the we're end my just in that really line

we're two done just So be the the one, to that other employees of of the to but hiring. work quarter, more we're to we be be but still little it's hiring move issue outside hire, we're there's a there, and so then we rates, that to getting do we're accomplished and which things just it's increase feel a the handle and second Part to Unfortunately, and done it. We is but it: those increase to in it's drag. it customers profitable the going of have to go is workloads, just of still fixing don't And through to getting been getting hire. and tough get process rates. to that's through going bit customers a part

Unidentified Analyst

much. one you Thank very it. Got follow-up additional And question there.

I what you as dedicated, your rate the warehouse both percentage of just You business. be for how And with of could customers? intermodal renegotiated, those well? to discuss the business were your are contractual businesses about remains discussions able any if talking going wondering and was

Jeffrey Rogers

- in that's because very talk dedicated The about I'll it Right. business. it's sections, all contractual all different.

a not it's but customers. - those of lot So

Our that is all customers five dedicated business million. make up $XXX probably

are even it's them. very not there's are a though difficult but because them few conversations, because through only large hard of customers, those those get to So

with really through dealing We've those for folks XX% secured X% it and work very on you just customers. are So one are anywhere - are another. at we lane. lots those on and rates large from those process And you just asked of

it's of depends. kind just So

is So varies on - really where the country. those what on that all dedicated it depending side, and the lane part of

of really business - XX% X% and seeing of about contract, increase, some rate The contractual seen spot. varied businesses and pretty about the spot highest is truckload, both the about we those rate, XX% majority If you about What to XX% from which are of is vast contract is to rest feel spot. the flip we're are renewal even, very is The renegotiations XX% the solid everybody for knows, we've increases with on the on about varying as contract the a lowest XX%, very, in a a increase. anywhere XX%, good between rates, and in contract intermodal that. XX% on them cases

all it's very, in So of firm a it, very there's and variation strong. lot but very

Unidentified Analyst

That's Thank you appreciated great you questions. much, color. my very answering

Jeffrey Rogers

All right.

Operator

from Newland Vermut line of [Operator Mike Instructions] with the comes Capital. Your question next

line is open. Your

Michael Vermut

doing? Hey, guys. How you're

Jeffrey Rogers

Hey, Mike.

Michael Vermut

over and there. in? the a to we're our see you're Obviously, looking next to here, view margin And your can everyone where Oh, expectations three the a when two, it is quarter say, whatnot. what on peak hit inning company Great years, take Trying you your side, one, are? sector what on the you on side? we've over And trying where revenue get

Jeffrey Rogers

Those real Thanks Michael. are questions. all good

there I at been different people that the the our so has business where saying we think lot we TL And at articles peak. were varied. a are is of and cycle, in are

we at where quarter, end finished I'll at. talk different of But a So each just we're at different the truckload look space, try kind place. business And I it's quarter. is - segments in when first to and first to the

changed unaware much still stronger, expect them something of, you we coming, that second, which unless much have to be significantly I'm are quarter and So third stronger.

perspective, up, in think but a increases keep than rates have Maybe peak were are So last year. they the spot in third and mind expect second always that. all I they in seasonal from to higher XX% peaked rate going we quarter, have rates the you're

that's maintain pretty that if So think they at solid. I level, darn

it's I stronger you a economic and have forward, from still all think perspective keep but shape pricing pretty strong you that's second third still you going output to in coming, the have that's activity, quarter have going still industrial than good been. us

to containers into shipping the acceleration, lot increase which industrial-based rate truckload just the When especially we That come. they've flatbed at side. the from our drayage we is do shipping their I in because the the think, to there's the get intermodal, we're all the and perspective for best a things what shipyards because of is me makes on yet of do, kind So businesses. look and started

accelerating So they're just their rates.

the the ports, in the the mention acquisition. tells capacity the looking of think the we've lot of still had business, crunches acquisitions of a yet railheads come success to upside I So don't that and still there's nothing Fore to at that we is not side that at best the with because And there. and me we're have that the

we that very good business. best to come So in feel yet still the that is

and is spiked and Class A saying Class hit we've forecast. then logistics all A So I go anybody And when think to talked about and Westport that don't trucking. my value-add I why on the business we've has the up, the truck truck peak Class A

higher we're look you forward, production. at throughout it is there If gets the year. What seeing the forecast, increased going

So from from going stronger we it's to are. and our like get perspective, that still feels seems where

going it's is all that. Class builds, So it's I we're are switch would truck the on perspective, you've damn investment supply, seeing And people the and reinvest is come. doing. know the reduce supplies, increasing my we're best that is talking A on tax. cash A see old to Class can Why you from don't your about, replacing while you yet are trucks to and I one, for increase every the replace of not dollar equipment to tax changes piece which because of fact the the what equipment: got, dollar Everything

I'm So just a are to and drivers it's those A increase lot of truck productions Class there that: sure replacement, no capacity. sales because are

I our then legacy a look some support business, But shifting there's the automotive, That's automotive best to again, light trucks, support truck we automotive on is all more SUVs, came do. there. again of decreased week we SUVs us logistics this they we which which, and do concerns wheelhouse. Ford production the is at think and which yet what even for come of production are and out And beauty I and to is the So our side. said lot the

XX that increase now our saw all we're customer expand top Boeing and defense, things gangbusters to and Boeing in, in aerospace as this Our everybody is list. are in of going trying reported how those year.

lot have we forward. a Boeing with of going So opportunities

I'm see a right I sure guess, I what is, for Mike, again, saying us don't So peak now.

yet best I the think come. to is

Michael Vermut

versus performance shape. on any coming, that ULH is historical When I our the into - like what's feel we've feeling we're there of see gotten better excellent. Once looking company Excellent, at you really, if once growth see on of stay that significant operating healthy like And over couple should we're past performance? we economy? things the next margin blowing peak the in income, years, this

Jude Beres

articulated Mike, as we top we as hey, over in the when this future can $X side, internally target sales has always benchmarking saying, how XXXX particular by our performance, and billion The XXXX far and is past to back be kind this Jeff have in of at also, couple on Jude. of that's the is and that that going line And we performing look business. we're internal should years. really

to margins, we looking get So And upon our additional those back of kind what that. grow, as network get we can to. as we're X% improve to to back want then leverage within we

Michael Vermut

Great, one acquisition. okay. on magnitude, us last you fantastic. was little give types look it the Can like accretion It what markets? here. you're And one. last end acquisition the It's looking Is same question at? can seems that just a fantastic you into - That's then the same of just else a

Jeffrey Rogers

Sure, and it. I'd things that I to keep like who I on to we we focus about we and I before, think do like are. simple. mentioned talked what

So don't we're we know. going go not that to acquire anything

I'm with they intermodal Fore with what So one obviously, the there. pleased strengths. play and happy there. team very That's we're and very do our the of

anything doing the space, in the we a at to couple that opportunities same or deeply on, in space looking thing we're going continue or we're So that of to We're to existing match very just acquisitions It at sense accretion. already and have look any make level in that do now to out to doesn't that it. go or going not our actually We're to margins. that. not going either of and do buy same doesn't add

vein. So it's that in same

always we that will be immediately accrete. it's So we think something to going

Michael Vermut

congrats okay Excellent, here. and excellent job

Jeffrey Rogers

Thanks Mike.

Jude Beres

Mike. Thanks

Operator

And questions at are presenters. time. no further our back the I to call there this over turn

Jeffrey Rogers

forward We appreciate Take to things appreciate interest. sure forward support Universal. everybody's you quarter look to We care. next good we of ahead. look Well, we to your and talking

Operator

today's gentlemen, concludes call. Ladies and conference this

disconnect. now may You

Steven Fitzpatrick	Vice President of Finance and Investor Relations
Jeffrey Rogers	Chief Executive Officer
Jude Beres	Chief Financial Officer
Michael Vermut	Newland Capital Management, LLC

Universal Logistics (ULH) 29 Apr 182018 Q1 Earnings call transcript